Trump May Scrap Tax Credit For EV Purchases After Inauguration
President-elect Donald Trump is reportedly preparing to target President Joe Biden’s electric vehicle (EV) policies, beginning with the repeal of the $7,500 tax credit for purchasing or leasing certain EV and plug-in hybrid models included in Biden's Inflation Reduction Act of 2022, according to Fox News.
The tax credit was intended to make EVs more affordable for consumers, but Trump’s team sees it as unnecessary and a burden on taxpayers. Critics warn that eliminating the incentive could slow the growth of EV adoption, potentially putting these vehicles out of financial reach for many consumers.
Scott Kunes, COO of Kunes Auto & RV Group, emphasized that the tax credits have significantly boosted EV sales and leases. “Their repeal would once again put those vehicles out of reach for the average consumer,” he told Fox News.
Similarly, Shawn McLaughlin, CEO of Emporia Energy, noted that many buyers leveraged the credit to adopt greener transportation options. However, McLaughlin also suggested that advancements in EV battery technology and production could soon make EVs competitively priced without subsidies, potentially achieving cost parity with gas-powered vehicles by 2026 or 2027.
Kreg Peeler, founder and CEO of EVject, highlighted a broader trend, predicting that autonomous vehicles (AVs) will dominate the market within the next decade. “As full autonomy rolls out, car buyers will no longer be the drivers. Fleets will become mainstream,” Peeler told Fox Business.
The EV tax credit debate comes amid Biden’s push to tighten regulations on gas-powered vehicles, a move criticized by Trump and his supporters. Biden’s administration recently finalized strict tailpipe emissions rules for vehicles starting in 2027, which will require automakers to significantly increase production of EVs and hybrids. By 2032, the regulations are expected to mandate that nearly 70% of new cars sold in the U.S. be zero- or low-emissions vehicles.
Critics, including American Fuel & Petrochemical Manufacturers President Chet Thompson and American Petroleum Institute CEO Mike Sommers, argue that these measures will make traditional gas-powered vehicles prohibitively expensive for most Americans. They have called on Congress to intervene, labeling the policies as "anti-consumer" and harmful to the U.S. auto industry.
Trump’s team has vowed to reverse Biden’s EV mandates on his first day in office. Karoline Leavitt, a spokesperson for Trump’s campaign, described the policies as “anti-jobs, anti-consumer, and anti-American,” warning they would harm U.S. autoworkers while benefiting competitors like China.